Cognizant Technology Solutions Corp. (CTSH) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Workday, Inc.

Cisco Systems, Inc.

Fortinet, Inc.

Broadridge Financial Solutions, Inc.

Nu Holdings Ltd.

Cognizant Technology Solutions Corp.

Accenture Plc

CDW Corp.

Block, Inc.

International Business Machines Corp.

Cloudflare, Inc.

Why is Cognizant Technology Solutions Corp. ?

High Management Efficiency with a high ROE of 17.01%

Company has a low Debt to Equity ratio (avg) at times

Poor long term growth as Operating profit has grown by an annual rate 3.69% of over the last 5 years

Flat results in Jun 25

DIVIDEND PAYOUT RATIO(Y) Lowest at 23.65%
CASH AND EQV(HY) Lowest at USD 3,800 MM
DEBT-EQUITY RATIO (HY) Highest at -4.13 %

With ROE of 16.38%, it has a very attractive valuation with a 2.66 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -5.18%, its profits have risen by 7.1% ; the PEG ratio of the company is 2.1

High Institutional Holdings at 99.12%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.
Their stake has increased by 0.66% over the previous quarter.

Underperformed the market in the last 1 year

Even though the market (S&P 500) has generated returns of 12.33% in the last 1 year, the stock has hugely underperformed and has generate negative returns of -5.18% returns

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Cognizant Technology Solutions Corp. should be less than 10%
Overall Portfolio exposure to Computers - Software & Consulting should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Computers - Software & Consulting)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Cognizant Technology Solutions Corp. for you?

Low Risk, Medium Return

Absolute

Risk Adjusted

Volatility

Cognizant Technology Solutions Corp.

0.28%

0.52

26.33%

S&P 500

13.22%

0.61

20.17%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

4.10%

EBIT Growth (5y)

3.69%

EBIT to Interest (avg)

100.00

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.08

Sales to Capital Employed (avg)

1.34

Tax Ratio

24.19%

Dividend Payout Ratio

26.63%

Pledged Shares

Institutional Holding

99.12%

ROCE (avg)

25.03%

ROE (avg)

17.01%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.66

EV to EBIT

12.45

EV to EBITDA

10.58

EV to Capital Employed

2.81

EV to Sales

1.91

PEG Ratio

2.07

Dividend Yield

155.70%

ROCE (Latest)

22.54%

ROE (Latest)

16.38%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Mildly Bearish

RSI

No Signal

Bollinger Bands

Bullish

Moving Averages

Mildly Bearish (Daily)

KST

Mildly Bullish

Mildly Bearish

Dow Theory

Mildly Bullish

OBV

No Trend

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

10What is working for the Company

OPERATING CASH FLOW(Y)

Highest at USD 2,565 MM

DIVIDEND PER SHARE(HY)

Highest at USD 4.89

NET SALES(Q)

Highest at USD 5,245 MM

INTEREST COVERAGE RATIO(Q)

Highest at 10,555.56

RAW MATERIAL COST(Y)

Fallen by 1.09% (YoY

OPERATING PROFIT(Q)

Highest at USD 950 MM

-3What is not working for the Company

DIVIDEND PAYOUT RATIO(Y)

Lowest at 23.65%

CASH AND EQV(HY)

Lowest at USD 3,800 MM

DEBT-EQUITY RATIO (HY)

Highest at -4.13 %

Here's what is working for Cognizant Technology Solutions Corp.

Net Sales

Highest at USD 5,245 MM and Grown

In each period in the last five periods

MOJO Watch

Near term sales trend is very positive

Net Sales (USD MM)

Interest Coverage Ratio

Highest at 10,555.56

in the last five periods

MOJO Watch

The company's ability to manage interest payments is improving

Operating Profit to Interest

Dividend per share

Highest at USD 4.89 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

Operating Cash Flow

Highest at USD 2,565 MM

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Operating Profit

Highest at USD 950 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (USD MM)

Raw Material Cost

Fallen by 1.09% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Cognizant Technology Solutions Corp.

Cash and Eqv

Lowest at USD 3,800 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debt-Equity Ratio

Highest at -4.13 %

in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Dividend Payout Ratio

Lowest at 23.65%

in the last five years

MOJO Watch

Company is distributing lower proportion of profits generated as dividend

DPR (%)